The stem cells — easy to harvest from the fluid left over from amniocentesis tests given to many pregnant women — were used to create bone, heart muscle, blood vessels, fat, and nerve and liver tissues, the study said.
The finding points to a promising avenue of research that sidesteps the hurdles facing embryonic stem cell research, which has been hampered by moral objections to the destruction of embryos that occurs when the cells are harvested.
The objections have been divisive, prompting President Bush to restrict federal funding for most human embryonic stem cell research. Those restrictions have sparked movements in some states to fund research on their own.
California's Proposition 71, approved in 2004, was designed to provide $3 billion for stem cell research but has met a vigorous legal challenge from opponents of the research.
Amniotic stem cell research ducks the controversy because no embryos are destroyed. The National Institutes of Health already funds such research.
The study also suggests another advantage: Embryonic cells can form tumors when implanted in lab animals, but amniotic-fluid stem cells do not appear to do so.
"If everything that people think about them turns out to be true, they'll be a powerful source for therapeutic cells," said Alan Russell, director of the McGowan Institute for Regenerative Medicine at the University of Pittsburgh, who wasn't involved in the study.
It is still unclear whether stem cells from amniotic fluid — the liquid that cushions fetuses in the womb — can produce the range of cell types that embryonic stem cells can.
"They can clearly generate a broad range of important cell types, but they may not do as many tricks as embryonic stem cells," said Dr. Robert Lanza, an embryonic stem cell researcher and head of scientific development at Advanced Cell Technology Inc. in Worcester, Mass.
But even if amniotic stem cells turn out to be less flexible, they still might be an important tool in the nascent field of regenerative medicine.
Dr. Dario Fauza, coordinator of the surgical research laboratories at Children's Hospital Boston, has used the cells to grow tissue to repair defective diaphragms and tracheas in sheep.
He has asked the Food and Drug Administration for permission to do the same for children born with herniated diaphragms. It would be the first human clinical trial involving amniotic stem cells, he said.
Swiss scientists Dorthe Schmidt and Simon Hoerstrup of University Hospital Zurich have used amniotic stem cells to grow heart valves. They are currently testing them in sheep.
The stem cells "may not be as earth-shattering a discovery as human embryonic stem cells, but these cells could prove to be equally important for medical therapy," said Lanza, who was not involved in the study. "I think this is an exciting breakthrough."
Amniotic-fluid stem cells lie somewhere between the two major categories of stem cells: embryonic and adult.
Embryonic stem cells are derived from days-old embryos. Nearly all of the development is still to come, so those cells must be extremely flexible.
That "pluripotency" is the reason researchers believe embryonic stem cells could offer cures for a wide range of ailments. They hope to use the cells to replace the insulin-secreting islet cells of diabetes patients and to grow brain tissue to treat stroke victims, among other treatments. But they don't yet know how.
Adult stem cells are narrowly focused on replenishing specific types of tissue that wear out over a lifetime, such as skin, hair and blood. Researchers around the world are looking for ways to expand the cells' range of capabilities.
Amniotic-fluid stem cells, which are sloughed off by the fetus, are "a different kind of a stem cell," Atala said. "It's not as early as a human embryonic stem cell and it's not as late as the adult stem cells."
Scientists surmised more than a decade ago that amniotic fluid would contain those cells and identified some after several years of searching.
Atala and his colleagues set out to determine just how plentiful and flexible the stem cells might be.
The researchers studied 10-milliliter samples of fluid extracted from pregnant women who had amniocentesis to screen fetuses for genetic abnormalities. Those tests are commonly performed early in the second trimester.
Of the myriad cells that make up amniotic fluid, the researchers found that about 1% had a surface marker that is a hallmark of embryonic stem cells. They took it as a signal that these cells might be pluripotent.
The researchers from Wake Forest and Harvard Medical School biochemically prompted the cells to transform into all of the main categories of embryonic tissue.
A key test was to see whether the cells functioned like normal cells.
Stem cells induced to become neural cells were able to secrete a neurotransmitter when stimulated by potassium ions, mimicking conditions inside the brain, the researchers reported. They also induced stem cells to develop into liver cells that were able to secrete urea, a compound produced in the liver.
Other stem cells that had been coaxed into becoming osteoblasts, which build up bone, were implanted in mice. The cells formed a tissue that was more dense than normal mouse bone, he said.
"You may be able to obtain the same medical benefits — and cure the same diseases — without the risks or controversy associated with embryonic stem cells," said Lanza of Advanced Cell Technology. "It's just what the doctor ordered."
The cells were easy to grow and maintain, and they did not form the tumors — jumbles of tissue that can include bits of fat, hair and teeth — that are common with embryonic stem cells, the researchers said.
"That's one of the biggest issues the FDA will be concerned about when it comes time to approve stem-cell-based therapies," said the University of Pittsburgh's Russell.
But Larry Goldstein, a professor of cellular and molecular medicine at UC San Diego who studies embryonic stem cells, said the absence of tumors might signal a limitation of amniotic stem cells. "It makes me wonder how pluripotent they are," said Goldstein, who was not involved in the study.
Though the cells might prove useful in some circumstances, Goldstein said, they aren't a substitute for embryonic stem cells. "They built a screwdriver here, but I need a wrench," he said.
The technology described in the study is owned by Wake Forest University Baptist Medical Center and controlled by Plureon Corp., a biotech start-up in Winston-Salem.
Atala serves on Plureon's board and directs its scientific advisory panel.
The researchers, whose study was primarily funded by the Joshua Frase Foundation and the Crown Foundation of the March of Dimes, reported they had found similar stem cells in samples of chorionic villi — a part of the placenta sometimes biopsied as an alternative to amniocentesis — and of placentas obtained after birth.
Stem cells could one day be routinely extracted from placentas and stored in case they are needed to create genetically matched tissues during a baby's lifetime, Atala said. Because the cells would be a perfect match, the transplanted tissues would not be rejected.
Amniotic-fluid stem cells could also be used to build a stem cell bank. It would take about 100,000 cell samples to obtain enough genetic diversity to cover 99% of the U.S. population, he said.